China Telecom plans to launch a mobile service in Britain targeting Chinese residents, businesses and visitors early this year, becoming the first Chinese carrier to launch such a service outside China, it said on Wednesday. The service will use rented space on the network of Everything Everywhere[2], the joint venture of France Telecom and Deutsche Telekom that is Britain's biggest operator.

China Telecom[6] currently offers corporate telecoms services to businesses around the world as well as to consumers and companies in China.

"We are keen to launch the service in the UK as soon as possible as there is a real gap in the market for the provision of tailored mobile services and competitive tariffs aimed at the growing Chinese population in the UK," said Yan Ou, China Telecom Europe's managing director.

There were 271,000 Chinese living in Britain in 2010, according to the Office for National Statistics, about 0.4% of the country's population.

Steven Hartley, telecom strategy practice leader at industry research firm Ovum[7], said the move was interesting for China Telecom but its effect on the market would likely be limited.

"The deal is notable for China Telecom's expansion outside of China and as an attempt for it to do something different to its rivals. However, the impact in the UK is likely to be muted," he said.

"The company's main selling point is likely to be cheap calls home. However, the likes of Lycamobile and Lebara already offer this. These rivals are also able to sell to a broader audience wanting to call other countries aside from China."

The new service, planned to launch in the first quarter of 2012, will take the number of Everything Everywhere's MVNO[3]services to 24. Other partners include Virgin Mobile , Lycamobile and Cable and Wireless.